Nonqualified moving expenses and expense reimbursements are reported in boxes 1, 3, and 5 (use box 14 if railroad retirement taxes apply) of Form W-2. These amounts are subject to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable).
Is reimbursement for moving expenses taxable?
When you give a relocating employee any sort of relocation benefit—whether it’s in the form of a signing bonus, reimbursement for moving expenses, or even when you book a flight or pay for a service on behalf of your employee—that money and/or those services are considered taxable income.
What can be claimed as moving expenses?
You can generally deduct your expenses of moving yourself, your family, and your belongings.
- Professional moving company services.
- Do-it-yourself moving trucks or pods.
- Gas and oil or the standard moving mileage rate, if you travel by car.
- Packing supplies (blankets, tape, boxes)
- Move insurance.
Can a company require an employee to repay relocation expenses?
Many companies are now requiring employees to repay at least some of the expenses the company has provided to help the employee relocate, including “gross-up” as reported on FORM 4782 – “Employee Moving Expense Information” – which the IRS requires employers to give their employees.
Can a company make you pay back moving expenses?
Yes, if you paid back income that was previously taxed. No, if the moving expenses were tax free. Most company paid moving expenses are a mixture of the two. The company is allowed to pay certain moving expenses on a tax free basis; e,g. your travel and the cost of moving your household belongings (things that are normally tax deductible).
How can I help my employee understand moving expenses?
Here are some things you can do to help employees understand this moving expense benefit and how it will affect their taxes: Give employees a job relocation package that explains how and when moving expenses will be reimbursed by your company.
Do you have to give employee receipts for moving expenses?
If you are giving the employee an advance on these expenses, the employee must return any excess money within a reasonable period of time. For example, let’s say you advance $5,000 for moving expenses and the employee gives you receipts for $3,650. The employee must give you a check for the balance ($1,350).
